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TMI Blog2024 (7) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... ement of income. Therefore, AO has rightly formed the belief of escapement of income in the present case. Even the ld. AR could not point out as to why the said observation of the Assessing Officer was not correct. So far as the reliance of Delta Airlines, INC [ 2012 (12) TMI 498 - ITAT MUMBAI ] we find that in the said case, the decision has been given only on the basis of the Third Member decision as discussed above, that there will be a tangible material to form the belief of escapement of income, which condition is duly fulfilled in the case in hand. We find that it is not a case of change of opinion at all as no second opinion could have been formed by any of the authority in view of the express statutory provisions of section 36(1)(viia) of the Act that deduction on account of provision for bad and doubtful debts cannot exceed more than 7.5% of the total income. Neither any second opinion nor two views were possible in this case, only one opinion/one view was possible in this case in view of the statutory provisions. There is no merit in the present appeal of the assessee, thus dismissed. - Shri Sanjay Garg, Judicial Member And Dr. Manish Borad, Accountant Member For the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead. He noted that the assessee had debited Rs. 1,83,22,123/-, which was excess claim on account of provision for bad and doubtful debts. On being asked in this respect, the assessee explained that out of the provisions made for NPA, a substantial amount was written back and credited to profit loss account in subsequent years. In support of this, the assessee referred to the audit report for assessment year 2010- 11. The Assessing Officer, however, noted that the said explanation of the assessee was not satisfactory because of provision for bad and doubtful debts of Rs. 1,83,22,123/- had been debited in the profit loss account during the year under consideration i.e. A.Y 2009-10 and due to that reason only, the income of the assessee had converted into loss. The Assessing Officer further observed that 10% of the aggregate average advances made by rural branches of the bank was allowable, however, the assessee had not furnished the addresses of the branches, which were situated in rural areas. Further, there was no proof submitted that the said branches were situated in rural areas where the population of the village as a unit was less than ten thousand. He in this respect relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the record. It is not the case of the assessee that the assessee was entitled to claim the said deduction as per law. It is a clear-cut case of escapement of income of the assessee on account of excess claim of deduction as per the provisions of section 36(1)(viia) of the Act. Therefore, in our view, it is not a case of change of opinion at all. It is an apparent case of escapement of income, which was noted by the jurisdictional ACIT when the assessment record was called upon from the ITO. 7.1 So far as the objections of the assessee are concerned, we have gone through the same. A one line reply given by the assessee to the show-cause notice is that the provision for bad and doubtful debts was allowable as per section 36(1)(viia) of the Act . This, in our view, would not fall in the definition of any objection as alleged by the ld. AR. This reply of the assessee was vague. Even the ld. AR has not demonstrated or argued at any point of time as to what was the objection of the assessee, which has not been adjudicated by the Assessing Officer. Merely, a reply for the sake of reply only, there being not raised any point which requires adjudication or any contention which the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Counsel on the Coordinate Mumbai Bench of the Tribunal in the Third Member decision in the case of Telco Dadajee Dhackjee Ltd. vs. DCIT (supra) is concerned, in the said case, reopening of assessment was done after four years. The Third Member in the said case has observed that where the return of income has been processed u/s 143(1) of the Act, there is no question of change of opinion. Therefore, the contention of the ld. Counsel that it is a case of change of opinion, is not tenable even in view of the Third Member decision. However, in the said Third Member decision of the Tribunal, it has been observed that the reasons to believe must have a live link with the formation of belief that income chargeable to tax has escaped assessment. That to hold that in every case where a return was processed and accepted u/s 143(1), the Assessing Officer will be free to reopen the same u/s 148 even in the absence of a live link between the reasons recorded and the formation of the belief, would be to make the conditions of section 147 and section 148 otiose as regards notices of reopening issued in cases where the return was originally processed under section 143(1). What has been held in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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